Corporate Governance Report 2006
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CORPORATE GOVERNANCE REPORT Corporate Governance Report 2006 Content How Trelleborg is governed Application of Swedish Code of Corporate Governance 2006 77 Shareholders 77 Annual General Meeting 77 Nominations Committee 78 Nominations Committee 2006 79 The Board of Directors and its activities 79 Auditors 81 Internal control and financial reporting 81 Composition of the Board and number of meetings 2006 81 Independence of the Board 81 Remuneration to Board of Directors 81 Remuneration to auditors 81 President and Group Management 82 Incentive program 83 Board of Directors and auditors 84 Internal control report 86 TRELLEBORG AB Group Management 88 76 ANNUAL REPORT 2006 CORPORATE GOVERNANCE REPORT How Trelleborg is governed Trelleborg applies the Swedish Code of Corporate Governance and in this section presents the 2006 Corporate Governance Report. Application of Swedish Code of A shares each carry ten votes and Series B 2006 Annual General Meeting took place on Corporate Governance 2006 shares each carry one vote. All of the Series Tuesday, April 25, 2006. Approximately 900 In its work to continuously follow up the A shares are owned by the Dunker Funds shareholders attended the meeting, represent- application of the Code, Trelleborg produced and Foundations, which were created ing about 67.5 percent of the votes. Anders the document entitled ”Overview of Trelle- through testamentary disposition by former Narvinger was elected Chairman of the borg AB’s application of the Swedish Code owner and founder of the Helsingborg and meeting. All Board members elected by the of Corporate Governance 2006,” which is Trelleborg rubber-production plants, Henry Annual General Meeting were present. available on the web site, www.trelleborg.com. Dunker, who died in 1962. Reviews in 2006 did not lead to Trelle- The number of shareholders in Trelleborg Summary of the decisions made at the borg reporting any deviations. at year-end was 44,223. Of the total number 2006 Annual General Meeting This Corporate Governance Report of shares, foreign shareholders corresponded • The meeting adopted the income state- has not been reviewed by the Company’s to approximately 30 percent. Institutions ment and balance sheet and the con- auditors. accounted for the majority of ownership. Of solidated income statement and con- the total shares at year-end, 84 percent were solidated balance sheet, decided to Shareholders owned by legal entities, 16 percent by private dispose of profits in accordance with the Trelleborg’s Series B shares have been traded individuals, representing 92 percent and 8 proposal on the treatment of unappro- on the Stockholm Stock Exchange since percent, respectively, of the total number of priated earnings, discharge the members 1964. The share capital in Trelleborg AB on votes. of the Board and the President from December 31, 2007 amounted to sek 2,259 m, liability and, in accordance with the represented by 90,357,261 shares. Trelleborg Annual General Meeting proposal by the Board and the President, has two classes of shares: 9,500,000 Series A The Annual General Meeting is generally distribute a dividend of sek 5.50 per shares and 80,857,261 Series B shares. Series held in the month of April in Trelleborg. The share for 2005. TRELLEBORG AB ANNUAL REPORT 2006 77 CORPORATE GOVERNANCE REPORT • The meeting decided that the number of follows: sek 800,000 to be paid to the the Chairman and other Board members Board members elected by the Annual Chairman and sek 300,000 to be paid to and, when applicable, present proposals General Meeting should remain seven and each member of the Board who is not an for auditors and remuneration to the Board that, as previously, no Board deputies employee of the Group. The meeting also and the auditors. The Meeting also decid- should be appointed. decided that remuneration should be ed on the procedure for the appointment paid to the Audit Committee in the of the members of the Nominations •Heléne Bergquist, Staffan Bohman, Rolf amount of sek 125,000 to the Chairman Committee and its work. Kjellman, Berthold Lindqvist, Claes of the Committee and sek 75,000 to the •In accordance with the Board proposal, Lindqvist and Anders Narvinger were other Audit Committee members, and the meeting decided to authorize the Board, re-elected to the Board and Peter Nilsson that, as previously, the auditors shall be in a departure from the shareholders’ was elected as a new member of the Board. compensated for reasonable expenses as preferential rights, to decide on the divest- • Anders Narvinger was re-elected Chairman specified by invoice based on actual time ment of the treasury shares as liquidity in of the Board. on the completion of their assignment. conjunction with acquisitions through • The meeting decided that fees to Board • The meeting decided that a Nominations business combinations of companies or members, excluding travel expenses, Committee shall prepare and present operations, and to authorize the Board, should be paid in the total amount of proposals to the shareholders at the Annual with or without preferential rights for sek 2,300,000, to be distributed as General Meeting regarding the election of shareholders, to decide on the divestment of treasury shares in a manner other than via the Stockholm Stock Exchange to fi- nance the acquisition of companies or operations. • The meeting decided on the principles Nominations SHAREHOLDERS External for remuneration and other conditions Committee auditors of employment for the President and other senior executives. Audit committee • The meeting decided on certain amend- BOARD Remunerations Committee ments to the Articles of Association Finance Committee following the provision from the new Swedish Companies Act that came into Objectives Reports and strategies and control force on January 1, 2006. • The meeting decided on a reduction of share capital of sek 140,577,500 through PRESIDENT AND CEO the cancellation without repayment of the 5,623,100 Series B shares repurchased CFO Legal by the Company supported by resolu- Objectives tions made by previous Annual General TreasuryIR IT Environment Risk management Reports Activities Finance Meetings. Internal control Personnel Forecasts For further information on the 2006 Annual Common Taxes and Group structure values Business General Meeting, refer to www.trelleborg. Business development Communications overview com, where all documents from the meeting Remuneration Structures are available. Trelleborg Trelleborg Trelleborg Trelleborg Engineered Automotive Sealing Wheel Systems Solutions Systems Business Business Business Business Nominations Committee units units units units Composition of the Nominations Committee Product Product Product Product In accordance with a decision by the Annual areas areas areas areas General Meeting, the Nominations Commit- tee shall consist of five members, who are to The Annual General Meeting is the Trelleborg Group’s highest decision-making body. The meeting appoints be representatives of five major shareholders at the Board of Directors, which is responsible for sharing the management and control of the Trelleborg Group the close of the third quarter. The procedures among the Board of Directors, its elected committees and the President in accordance with the Swedish for the appointment and work of the Nomi- Companies Act, other legislation, rules and regulations governing listed companies, including the Swedish Code of Corporate Governance, the Articles of Association and the Board’s and its Committees’ own internal nation Committee established by the meeting TRELLEBORG AB control instruments. Trelleborg’s overall legal structure is described in Note 17, page 66 of the Annual Report. are as follows: 78 ANNUAL REPORT 2006 CORPORATE GOVERNANCE REPORT • The Chairman of the Board shall, at the • Ramsay Brufer, Alecta, Secretary to the close of the third quarter, contact five ma- Nominations Committee. Read more about corporate governance in Trelleborg at jor shareholders in the company who shall • Lars Öhrstedt, AFA/TFA. be given the opportunity to appoint one •Henrik Didner, Didner & Gerge Mutual www.trelleborg.com/corporategovernance. member of the Nominations Committee Funds. Here you will find more information, for each, who should not be a Board member. example: • Åsa Nisell, Swedbank Robur Fonder. • Overview of Trelleborg AB’s application •In addition, the Nominations Committee Board Chairman Anders Narvinger was also may decide that the Board Chairman be of the Swedish Code of Corporate a member of the Nominations Committee Governance included but may not be made Chairman for 2006. The Committee represents approx- • Articles of Association of this Committee. imately 65 percent of the shareholders’ • When proposing nominations, the Board votes. No remuneration was paid to the • 2007 Annual General Meeting Chairman shall, as part of the Committee’s members of the Nominations Committee. • Annual General Meeting in prior years (Meeting documents, presentation by work, report to the Nominations Com- Work of the Nominations Committee the President, minutes, etc.) mittee on the current status of the Board’s The Nominations Committee held three work, requirements for specialist expertise meetings in 2006. As a basis for the Commit- • Nominations Committee and so forth, which may be significant to tee’s work, information on the company’s • Steering instruments (for example, Code the appointment of Board members. operations and strategic focus was presented of Conduct) •It shall be possible for individual Trelle- by the President at the first meeting. In ad- • Previous years’ Corporate Governance borg shareholders to submit proposals dition, the Board Chairman presented the Reports for Board members to the Nominations annual evaluations of Board members. At Committee for further evaluation within the second meeting, the Board Chairman the parameters of its work. reported on the Board’s work during the •Information concerning the composition year, the written rules of procedure for the of the Nominations Committee shall be Board, and the work of the Remunerations the period until the end of the next Annual published not later than six months prior Committee.